Steward Bank cuts interests rate, offers housing development mortgage

STEWARD Bank has cut its interests rate to below eight percent and joined the bandwagon of institutions that offer mortgage facilities to clients for housing development.

The bold move is likely to excite the market given widespread concern over the high cost of finance by businesses. Most banks are charging an average 12 percent following a directive by the Reserve Bank of Zimbabwe. In the past most banks charged up to 40 percent interest, which has been blamed for high levels of non-performing loans.

Speaking at the official opening of the Steward Banks' Gweru branch on Saturday, chief executive officer, Dr Lance Mambondiani, said the Econet subsidiary has been awarded a licence by the regulators to offer mortgage facilities.

"We have seen a lot of developments in terms of housing, our peers at National Building Society (NBS), FBC Building Society are very aggressive in this area and doing a great job.

"We are not a building society but we have thought of assisting our customers who have entrusted us with banking services," said Dr Mambondiani.

"We have been authorised by the regulator to offer mortgage facilities to our customers hence soon we will be in the market offering our customers with the finance."

He said that since his bank had acquired a licence it was setting aside capital for this development and will soon start offering loans to their customers.

"As for now we are cleaning up house so that we know we have the full capacity of the product that our customers will consider as relevant to their needs.

"In terms of the geographical planning we have looked into two segments, which is the national and the diaspora market. Our customers are also into the diaspora so we also need to consider them," said Dr Mambondiani.

"We are doing mortgage finance differently in supporting what is being done by the building societies because it is something that is at the core of every family so we want to be part of the journey."

Meanwhile, the bank has reduced its lending rates from 12 percent ceiling in line with the central bank guidelines.

"We have reduced our rates to as little as below eight percent on long time lending. We want to allow our customers to repay without struggling," he said.